BP will look to sell a considerable portion of its oil and gas assets even if crude oil prices rebound from the crash caused by Covid-19.
Moving forward, the FTSE 100 group wants to invest in more renewable energy – a strategy that was discussed at the company’s executives meeting in July, according to Reuters.
The major oil firm last month lowered its long-term oil price forecast to $55 a barrel, which means around $17.5bn worth of its assets are no longer economically viable.
However, sources close to BP have reportedly said that even if crude prices were to return to the highs of $65-$70 a barrel, it would use the opportunity to sell amid better market conditions.
BP has not yet responded to requests for comment.
The decision sheds some light on chief executive Bernard Looney’s plan to reduce BP’s oil and gas production by 40 per cent, or 1m barrels per day, by 2030.
“As we look at the outlook for BP over the next few years and as we see production declining by 40% it is clear we no longer need exploration to fund new growth,” Looney said this week. “We will not enter new countries to explore.”
He added that BP would continue to explore for oil near existing production and infrastructure as it would be low cost and help boost the firm’s cash flow to fund its transition to renewable energy.